The most important aspect of the material handling distributor/manufacturer relationship is that it is a partnership. Both parties must work together, capitalizing on each other’s strengths. The successful partnership will benefit both parties as each increases revenue and grows its market share.
Communication Skills are Vital
While it is important for the manufacturer to clearly communicate his expectations of the distributor, it is just as important for the distributor to communicate his expectations of the manufacturer. By communicating these expectations clearly and working in tandem, the success of the partnership is greatly enhanced.
Commoditization of our Industry
We cannot underestimate the downside of a failure to communicate or a failure to respect each other as partners. During the last few years, we increasingly have fought a battle to not be considered a commoditized industry. Should the partnership between manufacturer and distributor disintegrate, we risk an increased number of battles on this front and we all lose.
Note the impact of a manufacturer who modifies his method of going to market and sells direct in competition with the distributor. The impact can be just as severe when a geographical territory is flooded with additional distributors in competition with each other. When the distributor awards an order to the lowest bidding manufacturer, the relationship previously built on trust is nullified. The established relationship between the partners is violated. Once the partnership disintegrates, both parties tend to look elsewhere for a new partner, only to find that history does indeed repeat itself.
Teamwork in Action
The best vendor relationship I have encountered is a true partnership in which the material handling manufacturer and distributor are prospecting potential customers in a joint effort. The distributor provides information to his partner regarding potential end-users. The manufacturer can periodically provide marketing communications materials to the potential end-user. When that end-user is finally ready to make a purchasing decision, regardless of who the end-user calls, it is a win/win situation for the distributor and manufacturer. As a team, the partners can call on the end-user together, creating a win/win/win situation.